28th February 2018 - Tracey Payne

Behind the scenes – The Herbert Scott Centralised Investment Philosophy

When we explain the philosophy behind our centralised investment proposition, you’d be forgiven for making the assumption that we don’t do a lot! After all, the words “stick with it”, “unexciting”, “low trading costs” and “passive” give the impression that there isn’t a hive of activity surrounding our process.

And to some extent you would be right, given that we do not support the busy-ness of active trading.  But I can assure you that, in spite of this,  we are not sitting on our laurels.  Throughout the year, things happen in the Herbert Scott investment world that you may not even notice.  The sole intention of this ongoing “stuff” is to maximise the chances of us delivering the returns you need to live the fulfilling lives talked about with your adviser. We take this all very seriously and with a heavy sense of duty and responsibility.

So, what have we been doing recently? Well, I often use the time driving into work to think about the things that matter to our clients. And no doubt my thoughts are occasionally permeated by the dull background burble of the radio and, more specifically, news commentary such as the latest payroll figures, inflationary figures and talk about market activity. As an investment guru its hard to tune out of this ‘noise’ even though I know it serves very little purpose over the longer term.

Last week my inquisitiveness got the better of me.  I came into the office and ran our so called “heatmap” tool used to check how much our portfolios had moved out of line with their intended split between equities and fixed interest investments.  We run these checks at the start of every month to ensure that the asset split you started with, and which is key to the amount of risk you are exposed to, does not get too far out of kilter due to market movements. Whilst I had looked at the data a mere two weeks earlier, I just couldn’t help but check if the market volatility experienced since the beginning of the New Year had done something unexpected to our portfolios.  Of course, all was fine, as I should have known it would be.  After all, we have put in place a robust investment proposition that is intended stand the test of time.  Nevertheless, I did feel better after checking.

There are many other things that go un-noticed but rest assured there is a strong, ongoing governance surrounding our investment philosophy and we want you to know that your money is being sensibly looked after by experts that really do care.

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